Floating production systems provide a large share of the world's oil and the trend is accelerating as oil and gas operators learn offshore targets are bigger and more profitable than most accessible onshore reservoirs.

The world has embraced 159 floating production systems to date, including 93 floating production, storage and offloading vessels (FPSOs), 17 tension-leg platforms (TLPs), 38 production semisubmersibles and 11 production spars, according to a presentation by Eric Smith, consultant to the dean at Tulane University's A.B. Freeman School of Business, at the IBC Floating Productions Systems 2004 conference in Houston.

Using figures from International Marine Associates Inc., he said he expected orders for between 76 and 97 new floating production units in the next 5 years. Those orders will generate between US $19 billion and $25 billion in capital expenditures.

FPSOs, already the dominant type of floating production platform, will account for 71% of the new orders, followed by spars or TLPs at 21% and production semisubmersibles making up the remaining 8%. Between 16 and 20 of the orders will involve the use of existing floaters.

The world's operators are fickle in their choices for operations around the world. For example, there are no FPSOs in the Gulf of Mexico, but Africa has 20 and the North Sea 19. They also are the dominant platform off eastern Asia with 11 operating units, off Australia with nine units and they tied with floating storage and offloading vessels (FSOs) in the Mediterranean.

TLPs dominate in the Gulf of Mexico with 13 units, but the rest of the world has only four. Brazil clearly prefers semisubmersibles. At 20, it has more than the 16 combined in the rest of the world.
Everyone knows the number of floating production units is increasing, but that increase accelerated sharply in the 1990s. Use of floaters grew from one in 1974, climbing to 19 a decade later. By 1994, the number of floaters had climbed to 53 and the number has tripled to 159 this year, Smith said.

Most people in the industry know where the action is for floating production units. Of the 108 production units and 31 storage units installed in the past 7 years, 24% went to the North Sea, followed by 20% in the Gulf of Mexico, 19% in West Africa, 17% in Brazil, 16% in the Asia-Pacific and only 4% in the rest of the world, primarily Australia and eastern China.

Growth in the number of floating production units has been so rapid and the size of the discoveries so big that floating production systems now have more capacity to produce oil than Saudi Arabia or Russia.
At the end of 1983, floating units had only 100,000 b/d of production capacity. That number rose to 1.3 million b/d at the end of 1992. In the middle of this year, the number had soared to 11.9 million b/d, and it should jump another 33%, to 15.9 million b/d by the end of 2005, according to International Maritime Associates estimates.

As of June this year, 25 FPSOs were on order, including 13 newbuilds, eight conversions and four upgrades. Only two TLPs had been ordered, one mini-TLP and one wellhead TLP. All five of the ordered production semisubmersibles will be new, and all three of the production spars on order will be newly built. Of the five FSOs on order, one will be new and the others conversions.

Their destinations hold no surprises. Eleven of the new FPSOs, one TLP and one FSO will go to West Africa. Only one unit is on order for the North Sea - a semisubmersible. The Gulf of Mexico and Brazil look like the most active areas after West Africa with six units each. The Gulf of Mexico has three spars, two semisubmersibles and one TLP on order. Brazil has two semisubmersibles and four FPSOs.

The floating production construction market is hotly contested from engineering procurement, installation and commissioning to the yards that build the hulls and topsides. Those companies have been fighting over orders for an average 1.2 units a month for the past 84 months, Smith said.

In June, 84 floating production units were either planned or under study. More than a fourth of those units - 21 - are off West Africa, and 10 of those will moor in water between 3,000 ft and 5,000 ft (915 m and 1,525 m) deep. Only three will go into deeper water. The situation is reversed in the Gulf of Mexico with eight or the 13 planned units headed for ultradeep water and eight aimed at traditional deep water.
Among the larger near-term projects, Smith said, is Akpo, where bids are being evaluated for a large FPSO. Other large FPSOs are headed for Agbami, also off West Africa, and Marlim Leste and Roncador P-54 in the Campos Basin offshore Brazil.

Shell, at Kizomba C and D, will select either one or two FPSOs, he said, and West Africa's Moho/Bilondo complex will get either an FPSO or a recycles semisubmersible coming off charter.

In the longer term, Shell, Unocal, Total and minority partners will try to decide whether to use the Gulf of Mexico's first FPSO with shuttle tankers in the south Alaminos Canyon area or a more conventional production semisubmersible with a pipeline to shore. To date, at least 700 million boe has been discovered at Great White, Trident and Tobago, and Tiger, Gotcha, and Hammerhead are ready for drilling.

Smith said he believed the companies would get together for a combined development much like the Na Kika project from Shell and BP, or Canyon Express, with Total, BP and Marathon Oil.
Other longer-term projects include a large FPSO in ultradeep water in Angola's Block 31; a large FPSO at Bonga Southwest, possibly paired with Aparo, which looks like the same field, three or four more FPSOs or semisubmersibles at Marlim Sul and Roncador and continued development of deep water east of Borneo by Unocal with its Gehem and Ranggas projects, which probably will mirror West Seno with TLPs producing to FSOs.

When all of the orders are in, International Maritime Associates expects the number of floating production units in the world to grow to a low of 230 and a high of 246 by 2010.

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